HAL keen on joint venture with Sukhoi for passenger jet
Moscow, August 28
Hindustan Aeronautics Limited has evinced interest in exploring the possibility of forming a joint venture with the Russian Sukhoi aircraft manufacturer to produce a passenger jet, senior officials of Bangalore-based HAL said here.

An Airbus A380, the world's largest passenger plane, flies over the Airbus plant in Hamburg on Saturday. The jet made its debut flight from Toulouse (France) to Hamburg to demonstrate its capabilities to some 10,000 spectators attending a family festival at the Airbus plant.— Reuters

An employee of Japan's Mitsuoka Motor Corp displays the company's one-seater convertible sports car "Micro Type-F" at its showroom in Saitama, north of Tokyo, on Sunday. The micro car, which measures 2.495 m (8.19 ft) by 1.285 m (4.22 ft) and is equipped with a 49 cubic cm two-stroke engine, went on sale in Japan on Wednesday in a limited production run of 100 units with a price tag of 8,40,000 yen ($7,623). The company also released a do-it-yourself kit named "K-3" for the car in a limited quantity, with its price starting at 614,250 yen ($5,574). — Reuters

Royal Enfield’s focus area
is Punjab
Chennai,August 28
For big motor cycles like Royal Enfield, Punjab is number one in the company’s
list. Talking to The Tribune on the sidelines of the launch of two motor cycles,
Director, Sales and Marketing, Mr. S. Vaitheeswaran, said: “Around 20 per cent
of our sales in the country are in Punjab and the adjoining region.

Andhra Bank to open 50 branches
Mumbai, August 28
Hyderabad-based Andhra Bank said today it was planning to open 50 new branches this fiscal and would soon expand its operations abroad by opening a representative office in Dubai.

Tata Tele-Services' new tariff plan
Kolkata, August 28
Tata Tele-Services Ltd, the leading CDMA cellular service provider, has decided to switch its billing from per second pulse to per minute pulse and devise a differential tariff plan for calls made within its own network.

Market Update
Markets take a breather
The 16-week rally came to a halt last week. Sensex and Nifty lost close to 1 per cent each bringing to an end the dream run on the Indian stock markets. Sensex lost over 100 points to close at 7680, whereas Nifty lost 26 points to close 2357.

Moscow, August 28
Hindustan Aeronautics Limited (HAL) has evinced interest in exploring the possibility of forming a joint venture with the Russian Sukhoi aircraft manufacturer to produce a passenger jet, senior officials of Bangalore-based HAL said here.

The officials were talking to a group of Indian newsmen at the MAKS, 2005, Airshow, which concluded last week. It was the first time that HAL had put up its stall at the airshow.

Under the Russian Regional Jet (RRJ) programme, Sukhoi Aviation Holding is developing a family of jets to carry 60, 75 or 95 passengers, Co-designed by Boeing, the jet is scheduled to make its maiden flight by 2007 with deliveries set to begin in 2008, sources in the company’s Civil Aircraft Division said.

Sukhoi proposes to sell 800 jets by 2020, most of them abroad, they said.

India has already expressed its intention to invest $ 100 million in the venture which expects to corner about 16 per cent (about 800 aircraft) of the total market share for the short haul aircraft.

Pointing out that there was a huge demand for smaller aircraft, officials of the Russian carrier Aeroflot said the project could be very competitive.

HAL recently signed a multi-million, dollar deal with Russia for supply of AL-55 engines for the intermediate jet trainers (IJTs), which would replace the Kiran product of aircraft.

Under the agreement, India would buy 250 AL-55 engines for IJTs with the option of another 1,000 engines to be produced under licence in India.

Two prototypes of IJTs have been test-flown and the IAF has placed orders for a limited series production of 12 of these aircraft, the officials said.

“A demand of at least 200 aircraft is forecast with potential for much higher numbers,” they said.
— PTI

New Delhi, August 28
The Department of Telecom is believed to be considering an entry fee of about Rs 500 crore for Third Generation (3G) mobile service spectrum.

DoT officials who have gone through the preliminary round of discussions over the draft spectrum report prepared by its four-member panel are of the opinion that it did not address key issues on many aspects and, therefore, was not holistic in its suggestions.

Highly placed sources said DoT has put two senior officials now on board to give more 'punch' to the proposed spectrum policy where many issues like 3G spectrum pricing, allocation would be given a relook having all considerations.

When contacted, Telecom Secretary J S Sarma said, "the matter (issue of spectrum) is under examination".

Tata group chief Ratan Tata had proposed a Rs 1500 crore entry fee for spectrum besides a revenue-share as spectrum is scarce and valuable.

The draft spectrum report which mainly looked at the TRAI recommendations on spectrum, had proposed no entry fee on 3G spectrum saying this would hamper the growth of such services as operators would try to pass the cost of the service to
consumers.— PTI

London, August 28
As oil strides from one record high to another, the prediction of $100 a barrel crude no longer looks far-fetched.
After the prices shot to a record $68 a barrel on Thursday, analysts are increasingly inclined to accept that the stretched world market is in the throes of a “super spike”.

“There are no constraints on short-term prices. Speculators are driving oil and there’s nothing to stop it from going up,” said Mr Geoff
Pyne, energy consultant for Standard Bank. “Supply and demand will be important factors in the long run, but they are not in the market’s eye at the moment.”

Markets are vulnerable to any supply disruption, whatever the magnitude, with OPEC members pumping nearly flat out.

“There is such a little buffer of spare capacity,” said Mr Kevin Norrish at Barclays Capital. “If we were to see a major production loss in the world, it could happen.”

Financial betting firms say once the price pierces $70 a barrel, they will open their books to wagers on $100 oil. With no loss in momentum to a rally that has doubled the crude prices, the betting looks about to begin.

“We haven’t made a price yet, but we’ll certainly think about it when the price breaks $70,” said a London bookmaker.
— Reuters

New Delhi, Aug 28
India is exploring the option of sourcing rough diamonds from Angola and re-export the cut and finished sparking crystal.
India is exploring the possibility of sourcing rough diamonds and encouraging Indian entrepreneurs to set up cutting and polishing units for diamonds in Angola, said Union Commerce Minister Kamal Nath when Angolan Deputy Minister of Industry Abrabao Pio Dos Santos Gourgel called on
him. Mr Kamal Nath also conveyed India’s interest in participating in other important sectors like phosphate, manganese, copper, zinc.

The minister also drew the attention of the Angolan Government to ONGC Videsh’s willingness to invest over $ 1 billion in a refinery project in Lobito in Angola.

Chennai, August 28
For big motor cycles like Royal Enfield, Punjab is number one in the company’s
list. Talking to The Tribune on the sidelines of the launch of two motor cycles, Director, Sales and Marketing, Mr. S.
Vaitheeswaran, said: “Around 20 per cent of our sales in the country are in Punjab and the adjoining region. Out of the 32,000 motor cycles we sold last year, more than 8,000 were in that region.”

“Last year our sales growth in that region was 8 per cent but this year our target is 20 per cent,” he said.

Mr. R.
Ravichandran, CEO, Royal Enfield, said 99 per cent of the company’s motor cycles sold in India were those belonging to the 350 cc category and almost all of the 500 cc category were exported to the USA, the UK and Germany.

The company was working on the new Thunderbird, a 350 cc bike, to provide it with an integrated engine of 500 cc within the next six months.

Mr Vaitheeswaran said: “Though most of those 500 cc bikes will be exported, going by the demand in Punjab we have decided to market them first in that region in India.”

Mr. Ravichandran said Enfield earned revenue of Rs 160 crores and hoped to record a growth of 20 per cent in this fiscal year and also increase its production to 40,000 motor cycles per annum.

Mumbai, August 28
Hyderabad-based Andhra Bank said today it was planning to open 50 new branches this fiscal and would soon expand its operations abroad by opening a representative office in Dubai.

“We would be opening 50 new branches this fiscal with around 10 branches in unbanked areas of Orissa which have a huge Telugu-speaking population,” Andhra Bank CMD K. Ramakrishnan told reporters after signing an MOU with
K.J. Somaya College here for extending student loans last evening.

The bank was also interested in setting up a representative office in the USA as it had a large Telugu population.— PTI

Kolkata, August 28
Tata Tele-Services Ltd (TTSL), the leading CDMA cellular service provider, has decided to switch its billing from per second pulse to per minute pulse and devise a differential tariff plan for calls made within its own network.

Despite DoT contemplating banning cellular operators from offering lower rates for calls made within its network, the company said it would go ahead with the new plan, scheduled to be launched this month.

"Yes, we are moving ahead with our launch plans to offer cheaper rates for Tata Indicom mobile users. If DoT comes out with a directive, then we will withdraw it," TTSL COO Rajesh Puri said here.
— PTI

The 16-week rally came to a halt last week. Sensex and Nifty lost close to 1 per cent each bringing to an end the dream run on the Indian stock markets. Sensex lost over 100 points to close at 7680, whereas Nifty lost 26 points to close 2357.

With FII interest having tapered off in recent times towards Indian equities, the fizz on the Indian bourses, too, has disappeared. While FIIs have not been net sellers as yet, there has been a trend of subdued interest over the past three weeks. While FII inflow has slowed down, mutual funds continue to be net buyers on the bourses. Stock markets have continued to ignore the spiralling oil price and its effects on the economy. A hike in the domestic oil prices looks imminent and it would show in the inflation numbers for sure in the weeks following the hike.

Though we still remain positive on the long-term health of the market, the valuation makes us believe that the market may further go for correction in the short term. The liquidity from FII, the main driver of the market, has begun to dry up. Investors are advised to book profit for now.

Technical charts also indicate partial profit-booking. Though the market showed bounce from the 2,300 levels, a bearish engulfing pattern has been formed and profit-booking on rally is suggested. A break below the 2,300 levels can lead to a swift fall to the 2,200 levels.

J & K Bank

Jammu and Kashmir Bank has reported a marginal rise of 2.3% in its net profit from Rs 47.29 crore to Rs 48.44 crore for the first quarter of th ecurrent fiscal. A sharp drop in the trading income has led to the more or less flat net profit.

The key positives for the bank are improved socio-political enrironment in the state. The socio-political environment in the state of J&K is changing for the better and tourist inflows have touched the pre-militancy days’ numbers. Big-ticket investments are lined up for J&K, including the Prime Minister’s reconstruction plan worth Rs 24,000 crore. The World Bank and other multilateral institutions are funding investments in the state. All this will translate into more business for J&K Bank as it enjoys a near monopoly status in the state with 390-odd branches. The bank is also aiming to shore up its fee-based income by selling third party products like mutual funds and insurance. We believe with the improving of economic activity in the valley, the bank would be a clear beneficiary and the bank’s stock should reflect the same in the medium term.

Q. I am a teacher, my annual income is Rs 1,25,000 for the financial year 2005-06, Assessment Year 2006-07 being lady my age is 47 years. Detail of Income as under:

Salary Rs 65,000

Interest Rs 60,000

Total Rs 1,25,000

Please let me know can I give Form 15G to abide TDS.

Babita Sharma

A. The Finance Act 2005 provides that in case of a woman resident in India and below the age of 65 years at any time during the previous year shall not be liable to pay any tax if the total income does not exceed Rs 1,35,000. Accordingly, in view of the provisions of Section 197A(1A) of the Income-tax Act 1961 (The Act), you can file a declaration in Form 15G with the authority for making the payment of interest to you. I may add that such declaration has to be filed in duplicate.

Loss adjustment

Q. 1. I am 75 years old and retired from corporation without pension

I lost over Rs 1,00,000 in UTI 64 scandal when its price came down to Rs 6

The government come to our help and paid Rs 12 two years thereafter Kindly advise if this loss is adjustable in subsequent petty gain in share. I am not tax payer, my other income is only from fixed deposit in banks and post office and am regularly filing income-tax return which is nil

Hardayal Singh

A. The provisions of the Act relating to setoff and carry forward of losses under head capital gains are as under:-

(a) Loss relating to a short-term capital asset can be set off against the capital gain assessable for a particular assessment year in respect of any other asset.

(b) Loss relating to a long-term capital asset can be set off against the capital gain assessable for a particular assessment year in respect of a long-term capital asset.

(c) If the loss cannot be wholly set off, the amount of loss not so set off shall be carried forward to the following assessment year provided however that no such loss shall be carried forward for more than 8 assessment years immediately succeeding the assessment year in which the loss was first computed.

The loss, if any suffered by you on the sale of Units 64 can be set off in the manner explained herein above. I may add that from assessment year 2003-04 any income on transfer of units under unit scheme 1964 referred to in Schedule 1 to the Unit Trust of India (Transfer of undertaking and Repeal) Act 2002 on or after01.06.2002 is exempt from tax under Section 10(33) of the Act. In view of the above, if the transaction in your case is after the aforesaid date, the above provisions would not be applicable.

Form 15 H

Q. I am a senior citizen with annual income and pension of about Rs 180,000. As such I shall not be paying income tax for the financial year 2005-06. In case I withdraw some amount say Rs 30,000 from my NSS from the post office, they will be deducting TDS on the withdrawal amount. Please let me know whether I should submit to them Form

15-H or 15-G to avoid TDS alongwith the withdrawal form.

Gurjit Singh

A. The relevant form applicable in your case is Form 15H which will have to be filed in duplicate with the authority required to deduct tax at source.

Capital gain tax

Q. I purchased a property in the 1995. The details of payments made were as under:

a) I propose to sell the same for Rs 4 lakh. Please let me know the capital gain tax on it and how will it be calculated.

b) Further, can I show investment of the amount so received in a house purchased recently by my wife to save capital gain tax or else let me know the details of capital gain bond which can be purchased to save tax.

Romesh Kapoor

A. The details given by you do not indicate the year of possession of the property. Presuming that the year of possession was 1995 i.e. year in which you have purchased the property, the indexation would be allowable from the financial year 1995-96. The Cost Inflation Index for the said year being 281, the amount of indexed cost would be worked out as under:

The amount of capital gain can be invested in the purchase or construction of residential property within the specified period. However, the property so purchased or constructed should be in the name of the person who has earned the capital gain. Any purchase or construction of property in the name of your wife would not entitle you to claim the exemption.

Section 54EC of the Act specifies the bonds in which capital gain can be invested so as to claim exemption from the taxability of capital gain tax are as under. These bonds are redeemable after three years of the date of issuance.

(a) Bonds issued on or after 01.04.2000 by Nabard or by National Highway Authority of India.

(b) Bonds issued on or after 01.04.2001 by the Rural Electrification Corporation Ltd.

(c) Bonds issued on or after 01.04.2002 by National Housing Bank or by SIDBI.